Nine million relying on a retirement windfall
Even more worryingly, 3.6 million of them are counting on lottery luck to pay for their retirement, despite the odds of winning standing at over 14 million to one.
A further 7% are relying on some sort of inheritance to cover their living costs in old age, while the hopes of one in 20 (5%) rest on the value of their homes increasing substantially.
Interestingly, more men (27%) than women (21%) are hoping for a windfall to secure their financial future. And close to a third (30%) of optimistic Londoners are counting on a lump sum turning up, compared to just 15% of those living in the East of England.
Ray Chinn, LV= head of pensions, said: “It’s worrying to see that so many people are financially underprepared and are relying on a windfall to secure their financial future.
“According to the report, more than two-thirds (70%) of Britons expect their savings pots to be underfunded by the time they retire, or worse still have no idea if they will have sufficient retirement savings in place or not. If people want control over when they can retire it is essential that they properly plan how they will fund life after work.”
Heads in the clouds
Higher earners in particular have their heads in the clouds, with more than a third (37%) of those earning over £40k a year reliant on some sort of retirement windfall, compared to about a fifth (23%) of those earning under £40k. Full-time employees (26%) are also more likely to bank on a windfall than people without jobs (21%), while 30% of those paying into a company pension and 31% counting on the state pension need a windfall to supplement their retirement income. This compares to less than a quarter (23%) of Britons with a private pension.
Chinn added: “Retirement planning can seem daunting, especially as it’s a long way off for some. But people can give themselves peace of mind by taking matters into their own hands.
“Seeking professional financial advice is a good place to start; advisers can help you to identify areas where you need to save more and set out a retirement plan rather than leaving your financial security to chance.”